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Chuks Udo Okonta
The National Pension Commission (PenCom) has threatened to sanction Pension Fund Operators (PFOs) that are rejecting provisional Retiree Life Annuity (RLA) agreements presented by retirees already on Programmed Withdrawal (PW) seeking to transfer to RLA as their preferred mode of retirement benefits plan.
PenCom stated this in a circular signed by its Head, Surveillance Department, Ehimeme Ohioma, entitled: ‘Procedure for Reprogramming RSA Balance of Retirees Already on Programmed Withdrawal Exercising Their Rights to Transfer to Retiree Life Annuity’ and sent to all pension operators.
PenCom through the circular directed Pension Fund Administrators (PFAs) to reprogramme the current Retirement Savings Account (RSA) balance of retirees of PW who choose to transfer to RLA to obtain quotation from life insurance companies of their choice.
PFAs were also enjoined to reprogramme retiree’s RSA using the present RSA using the present RSA balance, current age and gender. PFAs were asked to make provision for one-month buffer to avoid gap in pension payout.
PenCom charged PFAs to ensure the proposed annuity value should at best be within the range of the minimum and maximum pension as determined on the PW template or higher than the maximum pension.
PFAs were also demanded to submit monthly returns to PenCom on all RLA rejection, on or before the 10th working day of the preceding month using the attached specimen format.
PenCom stated that appropriate sanction would be imposed for violation of the provision of the circular.